Charging application fees to people you don't even intend to evaluate or approve (ie, taking people's money and then just throwing their apps in the trash) would be fraud. 

They use several identity verification methods that make it more reliable than a fax machine.  

It’s about protecting the investment and the money behind it (loan).There are non recourse and recourse loans but you still need to qualify and the best way of establishing identity and credit worthiness is a FICO score and assets.You really don’t need the LLC right away you can do a TBD in the application but the underwriter and legal department will need to review the LLC docs.

This erroneous description of title fraud has always annoyed me. 

Also, if you buy two identical units you have better chances of getting an additional “quantity” discount.  

While reading "The House Hacking Strategy" by Craig Curelop, I came across the idea of trailer hacking and had a question.If I use an FHA loan to purchase a property, can I legally live in an RV or camper near/outside the property, or does the government consider this mortgage fraud for not actually living IN the house?

Wire fraud happens.

I did have the section 8 office cut aid to a tenant 2 weeks after they moved into a home because the tenants were committing housing fraud. 

The last thing you need is to be charging hundreds more than the identical house next door and no know it. 

That is mortgage fraud.